Key Issues

The interface between competition and consumer policies

The Sixth United Nations Conference to Review All Aspects of the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices (Geneva, 8–12 November 2010) invited UNCTAD to convene two expert meetings on consumer policy between the Review Conferences, separate from the Intergovernmental Group of Experts on Competition Law and Policy.

Hence, taking into account the existing United Nations guidelines for consumer protection (A/C.2/54/L.24) and the submissions by experts, the expert meeting will examine new consumer concerns, especially in developing countries and countries with economies in transition, such as the effects of the crisis in the financial sector on consumers, product safety, e-commerce, consumer access to damage redress, consumer representation, and consumer access to financial services.

The expert meeting will consider revisions to the United Nations guidelines for consumer protection, and will formulate appropriate recommendations for action in capacity-building as well as international cooperation in this field, with a view to responding appropriately to the important requests made by Sixth United Nations Conference to Review All Aspects of the Set. The expert meeting will have before it a report entitled “Consumer protection and competition policy” (TD/B/C.I/EM/2).

Consultations on the need to revise the United Nations guidelines for consumer protection

In the secretariat’s report entitled “Consumer protection and competition policy” (TD/B/C.I/EM/2), it is argued that in many markets, competition supports consumer interests, provided that general contract law and anti-deception laws are in place and enforced. Competitive sellers vie to attract consumers, and informed, educated consumers are able to understand the offers and make sensible choices, which reward the more efficient and innovative suppliers. But where consumers do not have reasonable access to the right information, or have decision-making biases, then suppliers can behave strategically to increase their profits at the expense of consumers. Consumer policies may be the best policy solution to help markets work better in these circumstances.

This example makes it apparent that improving the coherence between consumer and competition policies should be a central consideration to help markets work better, from the perspective of both the consumer and social welfare. Improved cooperation between consumer and competition authorities could include referring complaints, sharing the results of investigations, taking into account the impact of the remedies on other policy objectives, and — where appropriate — working together on investigations and to generate policy responses. Such investigations should not only take on retail practices that have a face-to-face impact on retail consumers, but should also deal with upstream issues relating to industry structure and the need for international action to prevent global anticompetitive practices.

Consumers are being presented with new products and new marketing strategies, and are increasingly engaging in cross-border commerce in consumer products. In addition, technological change has created new challenges for consumers, for example in finding an appropriate balance between intellectual property protection and access to knowledge. It is suggested that consideration be given to revising the United Nations guidelines for consumer protection, in the light of these and other developments.